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Why the U.S. Is Teeming with Fake Companies and How You Can Outsmart Them

  • Writer: y7consulting
    y7consulting
  • Jul 2
  • 2 min read
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Why This Topic Is Hot Right Now

Since the early 2020s the number of “paper-only LLCs” registered to anonymous mailboxes has skyrocketed faster than meme-coins on launch day. While you’re reading this sentence, someone in Wyoming is spinning up “Unicorn Global Holdings, Inc.”—featuring zero unicorns and no real office.


What Drives the Fraud Frenzy?

  1. Remote-mania – You can spin up a business from a Starbucks booth.

  2. FOMO-economy – Everyone else is “starting up,” so why not?

  3. Easy-money illusion – “Grab the deposit and disappear” is a tempting exit plan.


Red Flags You Can’t Ignore 🚩

Red Flag

How to Check

What Happens If You Don’t

Mirage Address: “Suite 567, 123 Main St.”—really just a P.O. Box.

Google Maps + Street View photos.

You’ll sue thin air.

EIN ≠ License: They wave an EIN letter like it’s a permit.

Request EIN letter and state certificate.

Money lands in Cousin Joe’s account.

Foggy Ownership

Ask for Operating Agreement or Shareholder List.

You won’t know whom to name in court.

Overnight Website

Wayback Machine: did the site exist last week?

Reputation hit à la Fyre Festival.

No-Social-Footprint Company in 2025

Check LinkedIn, BBB, Google Reviews.

They vanish faster than an Instagram Story.

Yes, introverted founders exist—verify anyway.


Due-Diligence Checklist

  1. Secretary of State Search – Status must be Active/Good Standing.

  2. EIN & W-9 – Names must match bank records.

  3. Physical Office – At least one real chair and coffee machine on-site.

  4. COI/Bond/License – Non-negotiable for transport, construction, finance.

  5. Payment Terms – Escrow, ACH with MFA; never wire to a personal account.

  6. References – Three happy clients (not three cousins).

  7. Cyber Hygiene – SSL certificate, corporate email addresses.

Download the printable PDF checklist—tape it to your laptop like a second-factor of common sense.


Myth-Busting With a Wink

Myth #1: “They have a slick logo—must be legit! Reality: That logo cost $50 on Fiverr. Check their balance sheet, not their brand sheet.

Myth #2: “They promise 200 % ROI—so they’re geniuses! "Reality: They are geniuses… at enriching themselves.


If a Red Flag Is Already Waving

  1. Stop-payment or freeze escrow funds.

  2. Send a Demand Letter citing UCC § 2-609

  3. Report to the FTC, BBB, and your state Attorney General. Let the complaint trail work for you.


Bottom Line for Busy CEOs

In an era of digital smoke-and-mirrors, partner reliability is the new gold. Verify paperwork, confirm the office exists outside the Metaverse, and sign deals with a clear head. You’ll save budget, nerves, and KPIs—leaving you free to read the next post from a cozy chair instead of a courtroom bench.


Coming Up Next

  • 💸 “Don’t Overpay for Vehicle Transport in 2025: Real-Time Pricing & Central Dispatch API Hacks.”

  • 📝 “ACH, Check, or Crypto? Finance Life-Hacks for Auto-Transport Brokers.”

  • 🔍 “Top 10 Background-Check Tools Cheaper Than a Lawyer.”


Subscribe, drop your stories, and let’s turn scam tactics into Friday-office jokes!

 
 
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